The retail sector was also in focus, headlined by Sears Holdings(SHLD), with many companies reporting quarterly results this week.

After initially rallying, Sears fell almost 6% after the company revealed plans to either unload its 51% stake in Sears Canada or sell the brand north of the border entirely. The announcement comes as Sears struggles to stem the bleeding in its core business.

Sears is in serious trouble

Macy's(M) was flat today after it announced quarterly earnings that topped estimates by a penny, and slightly lagging sales. On the positive side, the company hiked its dividend by 25% and boosted share buyback plans by $1.5 billion.

Inflation hawks may finally have something to crow about. The Labor Department said producer prices popped 0.6% in April, good for the biggest jump since September 2012. Economists had modeled for a softer increase of 0.2%.

Investors will get to see whether or not producers passed those higher prices down to customers on Thursday when the government releases its consumer price index.

Meanwhile, bond prices continue to defy expectations by rising. The 10-year Treasury yield, which moves opposite direction of the price, ticked down to 2.53% on Wednesday, touching the lowest level since late October.

The lower bond yields should keep a lid on borrowing costs for consumers and businesses alike, but they also signal investor trepidation about stocks.

Tech stocks could bounce back on Thursday as Cisco Systems (CSCO)revealed an earnings beat after trading ended. Shares of the tech bellwether climbed 5% in after-hours trading.